From OURA to STRIPE: how companies provide liquidity before going public

Ahead of its initial public offering, OURA has spent $1.17 billion repurchasing shares from certain shareholders. The transaction offers a different perspective on private financing: beyond the headline figures, it is important to distinguish between funding that supports the business, money that provides liquidity to shareholders and transactions that change the company’s balance sheet.

OURA’s IPO prospectus reveals a gap that warrants explanation. For the nine months ended 30 June 2026, the smart ring maker generated $60.8 million in net income, but reported a $924.3 million loss attributable to common shareholders. The difference stems from a $985 million deemed dividend. This reflects the accounting treatment of the difference between the price paid to repurchase preferred shares and their carrying amount. It is neither an operating loss nor a dividend paid in addition to the repurchases.

The cash outflows, however, are very real. To repurchase these shares, OURA drew on capital raised from investors, cash generated by its operations and borrowings. During the period, the company drew $375 million on its credit facility, primarily to finance share repurchases and general corporate purposes. Some shareholders were therefore able to turn part of their holdings into cash before the listing, while the company added debt to its balance sheet.

OURA is not an isolated case. At different stages of their development, Groupon, GoPro, Zoom, Stripe and Databricks have arranged transactions allowing investors or employees to access liquidity without waiting for an IPO. Their structures are not interchangeable, however: each illustrates a different way in which capital can flow.

Groupon: raising fresh capital to repurchase existing shares

Between December 2010 and January 2011, Groupon raised $946 million in gross proceeds through a Series G round. According to its prospectus, the company used $809.8 million, or almost 86% of that amount, to repurchase common and preferred shares held by certain shareholders. The mechanism is straightforward: investors subscribe for newly issued shares, and the company then uses a large portion of the proceeds to repurchase existing holdings. The round therefore largely funded liquidity for existing shareholders, not just the company’s growth.

GoPro: borrowing to pay a dividend

GoPro illustrates another approach. In December 2012, the company arranged bank financing to pay a $117.4 million dividend. Its 2014 prospectus subsequently set out plans to use part of the IPO proceeds to repay the term loan, whose outstanding balance still stood at $111 million as of 31 March 2014.

Unlike a share repurchase, the dividend allowed shareholders to receive cash without selling their shares. The company borrowed to make the distribution, then planned to use IPO proceeds to repay that debt. The listing was therefore intended to help repay financing that had benefited pre-IPO shareholders, rather than solely funding future operations.

Zoom: repurchasing shares and recording a “deemed dividend”

The prospectus prepared for Zoom’s 2019 IPO provides a particularly close precedent for the accounting treatment seen at OURA. In December 2016, alongside its Series D round, Zoom repurchased approximately $15 million worth of Series A preferred shares, followed by a further $4.6 million during the fiscal year ended 31 January 2018. In both cases, the shares were cancelled and the difference between their repurchase price and carrying amount was treated as a deemed dividend.

Cancelling shares reduces the number of shares outstanding, while the deemed dividend affects the calculation of income attributable to common shareholders without constituting an operating expense.

Stripe: funding employee liquidity rather than operations

In March 2023, Stripe announced a funding round of more than $6.5 billion intended to provide liquidity to current and former employees and cover tax obligations related to their equity compensation. At the time, the company said it did not need the capital to run its business. The plan included cancelling shares to offset the issuance of new shares to investors.

The round was intended to enable employees to realise some of the value they had accumulated, while managing the tax consequences and dilution associated with their compensation.

Databricks: combining growth, credit and liquidity

In January 2025, Databricks announced the closing of $10 billion in equity financing, alongside $5.25 billion in credit facilities. The stated uses of funds included product development, acquisitions, international expansion, liquidity for current and former employees, and the associated taxes. The transaction brought together several objectives within a single financing package. The credit facilities included a $2.5 billion revolving facility that was undrawn at the time of the announcement, and the release did not specify how much of the financing was earmarked for employee liquidity.

The key distinction: who pays the shareholders?

These examples highlight the distinction between liquidity for shareholders and liquidity for the company. In a direct secondary sale, a buyer acquires shares from an existing holder: the money passes between them, without bringing additional funds into the company. In a share repurchase, the company itself pays the sellers. Both mechanisms can coexist: in February 2024, Stripe announced a new liquidity offer funded primarily by investors, while also planning to use some of its own capital to repurchase shares.

The economic effect then depends on how the transaction is funded. A repurchase paid for with existing cash reduces available resources. A debt-financed repurchase creates a repayment obligation. Issuing new shares brings in capital, but its dilutive effect must be assessed alongside any share cancellations.

Providing an exit for some shareholders therefore does not automatically benefit those who remain. The price paid, the rights attached to the shares and the resources retained to develop the business remain decisive. The structures used by Groupon, GoPro and Zoom show precisely why these factors need to be assessed separately.

At OURA, this analysis must also take operating performance into account. The company generated $328 million in operating cash flow over the nine-month period. However, this figure benefited from a reduction in inventories, an increase in subscription payments collected in advance and a rise in amounts owed to manufacturers. This represents a genuine source of funding, but does not by itself establish a sustainable rate of cash generation.

For OURA, the IPO opens a new liquidity window

OURA’s initial prospectus provides for both the issuance of new shares and the sale of shares by existing shareholders. Only the first component will bring funds into the company; the proceeds from the second will go to the sellers. The number of shares and the price are not specified in this version of the document. The split between these two components will therefore be more informative than the overall size of the offering alone.

These precedents show that a company can finance its growth, reorganise its capital structure and provide liquidity to its shareholders on separate timelines. Assessing OURA’s plans will therefore require examining the capital actually raised by the company, further share sales by existing shareholders and the intended use of proceeds together, including any potential allocation to debt repayment.

With an initial round of liquidity already provided in private markets, the question is no longer simply what OURA will be worth as a public company, but what resources it will retain to fund its next stage of development.